Capital and performance management

Performance management is the centerpiece of our array of management tools. Under our systematic approach two fundamental processes form the points of departure for efficient enterprise and group management: the definition of a clear strategy geared to ensuring the Group’s long-term survival and – of no less importance – the consistent implementation of this strategy. Since instances of mismanagement are very often due to the inadequate implementation of strategy, we devote particularly close attention to the process steps that enable targeted orientation of our entrepreneurial actions to our strategic objectives.

The major stages of strategy implementation consist of the drawing up of strategic program planning, i.e. the breaking down of the strategic objectives into subgoals and the subsequent breaking down of the subgoals/strategic program planning into operational goals that are backed by concrete measures.

Performance management and the management of the segments are guided by the following basic principles:

• The Board of Management of the holding company sets out strategic parameters for the planning and orientation of business activities. The focus is on the Group’s core management ratios and on Group-wide strategic initiatives.
• Holding companies and segments use a consistent performance metric to manage their business.
• Performance is discussed and assessed in regular meetings between the Board members with responsibility for the holding company and the segments on the basis of the performance metric.

Using the performance metric we are able to link our strategic planning with the operational planning, inasmuch as we define our strategies in structured overviews. The performance metric not only encompasses purely financial core management ratios but also other relevant operational management ratios from four different perspectives: the financial perspective, the market/customer perspective, the process perspective and the staff perspective.